Deadbeat Illinois: Late health care payments puts burden on retirees

Retired professor G. Michael Killenberg found out the state wasn’t paying his health insurance bills while waiting in his allergist’s office for a weekly shot.

His doctor turned to him and said, “‘You know, your people have never paid,’” Killenberg said. “I said, ‘Oh no, come on, sure they have.’ ”

But sure enough, his state health insurance plan for retired employees was running between eight months to a year late on payments.

GREG STANLEY

Retired professor G. Michael Killenberg found out the state wasn’t paying his health insurance bills while waiting in his allergist’s office for a weekly shot.

His doctor turned to him and said, “‘You know, your people have never paid,’” Killenberg said. “I said, ‘Oh no, come on, sure they have.’ ”

But sure enough, his state health insurance plan for retired employees was running between eight months to a year late on payments.

Killenberg is one of more than 128,000 retired Illinois professors over the age of 65 waiting for health insurance claims to be paid.

State professors qualify for one of three health insurance plans, and all three are behind. The state, like most large organizations, self funds its insurance. For Illinois, that means the amount of cash budgeted for health insurance claims is set by state lawmakers, who have $5.3 billion in other backlogged bills to pay.

Like a soup kitchen that’s about to run out of food, the state really has two options: to either serve everyone in line at least a little of what’s left, or to keep serving until what’s left is gone and ask everyone else to come back next time.

The state has opted to pay the bills it can until the money is gone.

The state’s Quality Care health and dental plans are administered by the Illinois Central Management System.

In a statement, CMS called the state’s funding situation “difficult and unprecedented.”

“At this time funds remain insufficient to pay claims on a normal schedule, and we cannot estimate when a regular payment schedule will resume,” it said.

Killenberg taught journalism at Southern Illinois University Edwardsville for 15 years. He left for the University of South Florida in 1988, where he finished his career, and now at 69 he and his wife split time between Wisconsin and Florida.

Some of his doctors are willing to wait; some aren’t. He no longer gets allergy shots. His wife had to switch her doctor of 25 years.

Killenberg has been sent to a collection agency once, and threatened to be sent to an agency another time.

Delays are longer for retirees, like Killenberg, who have left the state, said Linda Brookhart, executive director of the State Universities Annuitants Association, an organization that represents about 208,000 retirees of the state university system.

“Everyone is behind, but when you’re out-of-network it’s a longer delay,” Brookhart said. “And it’s going to continue for the foreseeable future.”

The state has been delaying insurance payments for its retirees for more than three years, Brookhart said.

“Creditors come to them and threaten to garnish wages from their spouses if their spouses are working,” she said. “They threaten to put liens against their houses. In some cases, the retirees must start making payments to those doctors, hospitals and clinics until the state decides to pay.”

When retirees have to pay up front, the state is effectively borrowing from its retired employees.

And the state itself is worse off for the delay. It pays 8 percent interest to health care providers on all claims that are more than a month late.